A representative for state securities regulators say they should continue to share responsibility for regulating the life settlement market.
Steve Hall, deputy general counsel at the North American Securities Administrators Association, Washington, talked about state securities regulators’ role in the secondary life arena at a recent conference call organized by the National Conference of Insurance Legislators, Troy, N.Y.
State lawmakers who belong to NCOIL are working on revisions to NCOIL’s life settlements model.
Hall recommended that NCOIL delete model provisions that relate to securities.
Securities matters should be left to securities regulators, Hall said.
Another speaker, Rep. George Keiser, R-Bismarck, N.D., said his state has enacted the latest revisions to the Viatical Settlements Model Act, which was developed by the National Association of Insurance Commissioners, Kansas City, Mo.
Despite the update, North Dakota life settlement laws still leave gray areas, and one of the gray areas has to do with when an effort to raise capital to fund a life settlement should be considered a security, Keiser said.
Sandy Praeger, Kansas insurance commissioner and NAIC president elect, said the important thing is to properly regulate the market.
“We both have the same consumer,” Praeger said of state insurance and state securities regulators. “We need to make sure that there are appropriate safeguards for consumers.”
But, if regulation of the life settlement market is going to be split between insurance and securities regulators, then it is important not to have duplication of regulation, because each set of regulators will assume that the other is overseeing a particular aspect of the market, Praeger said.
Conversely, it is also important that regulation not be overly burdensome on the market, Praeger said.